Wouldn’t it be great if our organizations could get a checkup the way we go to the doctor to get a checkup? When you go to the doctor for a checkup, she takes your blood pressure, listens to your heartbeat, and generally checks your vital signs to ensure they’re within normal parameters. Anything that stands out as unusual can be investigated and, if possible, corrected to ensure you stay healthy for a long time to come.
Nonprofit organizations could also benefit from checkups. Their financial health, along with their overall operational health, needs to be in tip-top shape to continue fulfilling their mission for a long time to come.
Here are seven “vital signs” to check on the health of your nonprofit organization. If anything is amiss, it’s time to speak with , your nonprofit counselor, to correct it before it becomes an emergency.
Seven “Vital Signs” to Check on Your Nonprofit
The ‘vital signs’ in this list fall into three major categories:
- Financial: dealing with the nonprofit’s funding
- Operational: dealing with the organization’s corporate infrastructure, culture, or programs
- Marketing: how the organization appears before the general public and donors
The following are typical signs of a troubled organization. Check these ‘vital signs’ against your organization. If you see any, it’s time to take action.
- Chronic cash-flow problems: Are you always scrambling to find the cash to pay the bills? How about chasing after receivables and invoices each month? Persistent cash flow problems are a sign that something is amiss in the way you’re running your nonprofit.
- Crisis-driven funding: A grant dries up, and there’s a scramble to fill the gap. Or there’s a push for an emergency funding drive because no one realized that the coffers were running low to fund the programs to the end of the year. Anything with the word “crisis” in it should be a red flag that something unhealthy is brewing in the organization.
- High staff turnover: High staff turnover in any organization or company is a big warning sign of an unhealthy corporate culture. It usually means high stress and little fulfillment for the employees. At a nonprofit, it may also be a sign of a dysfunctional organization that makes it difficult for people to do their work. High turnover rates are a big warning sign that should be investigated immediately.
- Burnout: Burnout goes along with high attrition rates. Burnout means that people no longer care about their work. They may continue to work at the nonprofit or volunteer out of a sense of obligation, but the passion, the drive, the fire to fulfill the mission is no longer there.
- Loss of programs: Programs are quietly retired without much ado. Instead of an outcry that it’s needed, such programs fade away for lack of participation.
- Adding many new programs at once: The flip side of loss of programs is the frantic push to add more programs. It’s as if the new programs will somehow “make things right” within the organization. The feeling one gets amid all the new programs being added is a feeling of frantic desperation rather than healthy growth.
- Bad press or negative mentions from the public: One or two bad mentions may not signify much, but consistent questioning of the organization’s leadership, mission, and funding are red flags that the nonprofit is sending signals that it’s not doing what it’s supposed to be doing to support its mission.
All nonprofits, even the healthiest ones, may pass through one or all seven of these issues at any given time. The point isn’t to check off each one with a sigh of relief – “Whew, glad we don’t do that!” – But to see if it’s a chronic problem. Chronic, long-term issues, such as high turnover or poor cash flow, can sap the energy of an organization to the point where it begins to falter. One quarter of high turnover may be a blip on the radar, but a year of people coming and going can seriously degrade the morale of those left in the organization and leave it leaderless. Look for patterns rather than a checklist of vital signs to spot problems.
If you’re not sure how healthy your organization is, then speak with the experts at Welter Consulting. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please at 206-605-3113 for more information or to schedule a ‘vital sign checkup.’